G20 Leaders Agree on Actions to Manage Global Financial Crisis
The G20 summit on November 15 produced some worthwhile results and set the table for ongoing work in a number of areas.
Perhaps the most interesting outcomes were two that do not necessarily bear directly on the financial crisis, but which speak to underlying issues that need to be addressed going forward. First, to address mounting fears that protectionism may start to creep in to the policies of some countries, the G20 agreed that none of its members would take protectionist steps in the next 12 months. Second, the summiteers agreed to look for ways to re-capitalize the International Monetary Fund (IMF) and to give developing countries more of a role in its governance, thereby reducing the role of Europe.
The leaders agreed that transparency in the markets is important and that monetary and fiscal policy should be used "as appropriate" to stimulate economies while the governments continue to work on re-establishing financial stability.
According to the White House summary of the event:
"Today's Summit achieved five key objectives.
"The leaders:
- Reached a common understanding of the root causes of the global crisis;
- Reviewed actions countries have taken and will take to address the immediate and strengthen growth;
- Agreed on common principles for reforming our financial markets;
- Launched an action plan to implement those principles and asked ministers to develop further specific recommendations that will be reviewed by leaders at a subsequent summit; and
- Reaffirmed their commitment to free market principles."
"The leaders agreed that immediate steps could be taken or considered to restore growth and support emerging market economies by:
- Continuing to take whatever further actions are necessary to stabilize the financial system;
- Recognizing the importance of monetary policy support and using fiscal measures, as appropriate;
- Providing liquidity to help unfreeze credit markets; and
- Ensuring that the International Monetary Fund (IMF), World Bank and other multilateral development banks (MDBs) have sufficient resources to assist developing countries affected by the crisis, as well as provide trade and infrastructure financing."
The group agreed to have it's next meeting on April 30—the 101st day of Barack Obama's term as President of the United States."
